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COURT OVERTURNS FAX SPAM BAN

Says Law Goes Too Far

WASHINGTON (AdAge.com) -- A U.S. district court judge in Missouri has overturned part of the Telephone Consumer Protection Act banning junk fax ads, citing recent Supreme Court decisions that find the law goes too far in limiting commercial messages that aren't scams.

Judge Stephen N. Limbaugh's decision is part of a 24-page opinion in a case Missouri Attorney General Jeremiah "Jay" Nixon originally brought in separate suits against American Blast Fax and Fax.com to stop the companies from sending unsolicited faxes. The Federal Communications Commission, which administers the law nationally, was also a party in the case.

The telephone consumer protection law has been upheld previously by other district courts and in 1994 by a San Francisco-based U.S. Appellate circuit court. But that was before the U.S. Supreme Court issued several recent decisions narrowing grounds when ads can be banned.

Not adequately justfied
In the March 13 Missouri ruling, which became available last week, the judge said he saw "potential" for problems, but little evidence. He said Congress, in approving the 1991 legislation, hadn't adequately justified significant economic harms, leaving the government without proof of a "substantial interest." Also, the government hadn't shown banning ads would significantly reduce junk faxes or that a ban on unsolicited ads was necessary to eliminate the problem, he said.

He also said a "do not fax" list and other measures "would promote the government's interest and yet be less intrusive to First Amendment rights," and that the law distinguishing between fax advertisements and other unsolicited faxes has "no rationality."

Appeal planned
Government lawyers intend to appeal.

"The case is really important. It is the basis for telemarketing regulation like 'do not call' lists," said Chuck Hatfield, counsel for Mr. Nixon.

Advertising lawyers and lawyers for Fax.com (American Blast Fax dissolved while the suit was under way), however, suggested the decision was correct.

"It is very significant because this is the first court that has been willing to look and apply the First Amendment question in a thorough and considerate way," said Mary Ann Wymore, the St. Louis lawyer who represented Los Angeles-based Fax.com.

The American Teleservices Association, which represents telemarketers, said it believes the ruling raises questions about the Federal Trade Commission's proposal to establish its own national "do not call" list.